Review of 2012 Themes & Forecast

With 2012 in the books, let’s revisit last year’s predictions (click here for 2012 Themes & Forecast) and let’s see how the predictions matched up to what actually happened. Let’s start with a review of last year’s M&A stocks and see how they did.

2012 M&A Picks with Performance Data
Closing Price Last Trade or Price Percentage of
Acquired 1/6/2012 1/4/2013 Change
InterDigital IDCC No 42.07 44.12 4.87%
InterNAP INAP No 5.74 7.05 22.82%
Netflix NFLX No 86.1 95.98 11.48%
RIM RIMM No 15.34 11.95 -22.10%
Nokia NOK No 5.24 4.16 -20.61%
Sprint^ S Yes 2.19 5.92 170.32%
Riverbed RVBD No 25.77 21.14 -17.97%
ZIX ZIXI No 2.96 2.9 -2.03%
Tekelec* TKLC Yes 10.95 11
Average Gain 18.35%
* – Accidentally listed from the prior year as they had already agreed to be acquired
^ – Still trades but majority stake taken by Softbank

Highlights of 2012 – On the Money

  • M&A cooled a little but some very interesting deals got done. Your money would have done well in these stocks. Overall, if you held every stock absent Tekelec, your return on equal dollar positions in the other stocks would have netted you a return of over 18% for the year, beating the DOW and S&P 500 handily. Tekelec (which was removed from the portfolio in January 2012 as the merger was finalized) should have been omitted because it was a holdover recommendation from 2011, already in the stages of acquisition.
  • Sprint was a huge winner, nearly tripling in price on the purchase by Softbank.
  • Netflix could have booked very big gains if you sold early in the year (which would have really juiced your performance as it reached a rapid high of $129 in early February). If you are still holding, keep in mind Icahn joined this party in the fall.
  • Dot Com valuations finally got caught in the hype for many firms. Facebook, Groupon, Zynga, Pandora all saw their shares drop precipitously before rebounding slightly.
  • Microsoft shipped Windows 8 and sales have been lackluster at best for their desktop upgrade.
  • Online education gained major recognition in the media and from new users being introduced to the medium.
  • M2M gained major momentum and appears ready to catch fire. Networks of sensors with direct M2M connections now underpin connected health care and consumer-ready automotive telematics. Verizon is so hyped on this space they went out and purchased Hughes Telematics to grab a share of this pie.

Lowlights of 2012 – Early Though Still Possible

  • M&A never happened for RIM, Nokia or Riverbed. Their stocks were down quite a bit on the year before rallying. I am not a huge RIM fan, but surprised that it still hasn’t been acquired by someone.
  • Apple did not release the killer iTV product but more on that in a moment.
  • Microsoft tablets have done much poorer than expected. I believe this has to do with Microsoft deciding to leave their channel out of the mix thus leaving behind their most critical asset in competing against Apple. Is it too late to correct?
  • Mobile payments have continued to advance but no thanks to Near Field Communications (NFC) which have failed to get enough chips deployed to have any serious impact.

What could happen next year? Check out 2013 Tech Themes & Forecast.

Why Apple and Microsoft Need Each other – at Least for Now

Most of us witnessed Apple’s invasion of corporate America. A wide range of executives, power users and recent graduates have hit the work scene with their own iPhone, iPad and Macbooks or required that their companies purchase some of these items. Several well-known companies have rolled out thousands of iPads to entire divisions within their companies. Liquid Networx has observed this first hand, prompting us to reevaluate our policies and support procedures.

Let me share my own personal experience. An early adopter of the iPad and iPhone, I decided to experiment with a Mac Air last year—the hardware was just too tempting to pass up. A number of colleagues. and occasionally even customers, were asking if you could really run off a Mac for business without using a Windows Virtual Machine on the device. Excellent question. After living off of the Mac Air for about 18 months while using a range of other devices and platforms, I have advice for both Microsoft which is facing the brunt of my frustration and for Apple which is close behind.

The Now

I’ll start with the good, the bad and the ugly with Microsoft. On the pro side, from my Mac Air I’ve had zero problems sharing files with PC users utilizing recent versions of MS Office. Microsoft has made great strides in ensuring the file formats normally work without a hitch. Linking into SharePoint also works with relative ease. The only major “gotcha” (which isn’t Microsoft’s fault) is that many of the add-ons such as document management products and file comparison utilities still do not run natively on the Mac.

Now for the bad. The Mac Air menus inside Office are inconvenient and clumsy as they are non-standard with the Windows counterpart. The controls don’t match what users are accustomed to on Windows, nor do they emulate most other Mac software. Therefore you waste too much time searching for features with which you’re typically familiar. In some cases, they’re simply missing altogether.

That bring us to the ugly. The Outlook module inside Office 2011 shouldn’t be called Outlook, though it is an improvement over Entourage. When purchasing a product called Office 2011, you might imagine that the software bundled inside would be an improvement over Office 2010, regardless of the platform designation. Unfortunately, I can assure you this is not the case. Outlook 2011 looks okay at first glance, but there are a number of areas Microsoft must to address. Where to begin? For starters, the “offline” mode requires some attention as the software behaves sluggishly in this mode. Also, I’m a bit nauseated by the spinning rainbow pinwheel each time I open up contacts. When switching to this view, there is invariably a 20-30 second delay when you can do absolutely nothing but wait until the pinwheel stops its rotations and finally returns control to the user.

Cloud to the Rescue? Not quite yet

Cloud services represent another area where some of the ugliness assimilating Apple and Microsoft can be abridged. Both companies have made integration with outside cloud services far more difficult than they should be. For instance, Windows users can sync Google contacts and calendars with Outlook, but Mac users cannot. Apple is also guilty of delaying availability of iCloud to PC users. Assuming you have an Apple device, iCloud is great. But as far as I can tell, it’s worthless with any other OS or hardware. I think Apple is really missing the mark here as they made huge inroads into Windows Land when they made iTunes available for the platform. Now Apple is at a critical juncture again. I’m ready to see the company make iCloud fully available for Windows and other platforms, and perhaps have the rest of their cloud strategy become as pervasive as iTunes. Forget the enterprise the current cloud offering doesn’t even work well for consumers or the SMB.

Impact not just to Apple

With the Windows 8 launch being tepid at best (both across the desktop OS and mobile platforms), now is the time that Microsoft needs to solidify the Office franchise as the platform of choice for Enterprise class customers and the SMB. To begin with Microsoft should make Office available for the iPad. Unfortunately nobody knows if or when this might happen. Forbes recently ran the following article on why this isn’t likely to happen anytime soon. Which brings to mind why hasn’t Microsoft clarified its position on the iPad especially since so many of their customers now own one. While Microsoft would love everyone to buy a Windows 8 tablet the adoption rate even under the rosiest scenarios being offered is just not going to make a significant dent in the total market for tablets – at least not yet. Besides making me happy why should Microsoft do this? Microsoft’s failure to make Office work seamlessly across Apple products could open the door for even more defections to Google Apps to occur. Ensuring that the Office franchise works seamlessly with Mac and IOS is not only good for users, but to protect the franchise.

More Questions than Answers

If you were Microsoft what would you do? Will Office 2013 for the Mac will finally rival the Windows version? Who shares more of the blame for lack of compatibility and functionality? Where are both companies going over the next few years? What, if anything, will make them play nicer together? Would universal Office apps across the Apple universe and Android platforms slow the adoption of Google Apps? No matter which way you look the stakes are high and the risks are many for everyone involved. This is for sure – Microsoft/Apple dysfunction only benefits Google and could hurt both of them in the long run.


Mushrooms, Apples and Beatle’s: What Apple Should do with All that Cash

Much has been discussed about Apple’s cash hoard and how it can best be used. This discussion often ends with the opinion that Apple should at least initiate a dividend or some other unexciting scenario. Of course I’m not Tim Cook, but that won’t prevent me from suggesting what he should do with all that mounting cash.

I actually first thought of the scenario described below some years ago and shared it with some friends. The thought was that if anyone could pull this off and realize the full value from the acquisition, it would be Steve Jobs. The problem with this idea at the time was the company I believed they should acquire was riding a very hot product cycle and had seen their shares rise dramatically. There was also the issue of whether or not Apple was really committed to their TV strategy. As with every good deal, it’s always about timing. And I believe the timing is finally right.

So what do mushrooms have to do with apples? If you haven’t guessed already, I’m talking about Nintendo. And in the event you haven’t checked in on Nintendo in awhile, here’s a quick rundown. It’s currently in a product transition period. After scoring a runaway hit with the DS and Wii, the company is currently searching for and working to develop its “next big thing”. I believe this has positioned the company in a timeframe where a deal could be done. Nintendo’s market cap is currently around $17 billion and shrinking by the day. In a couple more trading sessions, the stock could be trading at book, which isn’t too far away. But the story gets better. The company is sitting on over $11.5B in cash and no debt to speak of.

The first part of this acquisition is easy to understand—Apple would pick up some great intellectual property and potential protection around the world. There is also the potential benefit of having access to new technology that Nintendo is currently developing in their R&D facilities that could be integrated into future versions of the Apple TV. Based on this piece alone I don’t know that the stock is cheap enough to do the deal, but there’s still more to factor.

Now here’s where I thought Steve Job’s connections, experience with Pixar, Disney and licensing would have culminated perfectly. Just think about the game libraries, characters and licensing that Apple would acquire. Apple could do one of two things with this: 1) They could swallow it whole and have a real game development arm or, 2) these characters could be easily licensed to any number of media studios creating an endless supply of royalties and a kick to Apple earnings for years to come. Who wouldn’t want to license this library? Do you think Disney, Dreamworks, Marvel, EA and others would be interested? Kids are already fascinated with Apple and this would only give them further reach and branding opportunities.

I am reminded of what Paul McCartney once told Michael Jackson. Michael asked Paul what was the best thing he could do with his money? Paul told him he had regretted not owning 100% of the Beatle’s catalog and that he wanted to acquire the 50% of it, held in ATV at the time. Paul said that owning the rights to great music was a good investment. Did Michael heed Paul’s advice? You bet he did. He went on to outbid Paul and others by buying the ATV library which brought with it a 50% interest in the vast majority of the Beatle’s library! I’m uncertain how this affected their friendship, but given Michael’s spending habits this was probably one of his best purchases ever.

While the Nintendo library doesn’t get you John, Paul, George or Ringo, it could net you Donkey Kong, Yoshi, Link, Mario, Luigi, Peach and much more. If you like this strategy (though the chart is ugly), you should keep an eye on Nintendo. This stock could still go quite a bit lower but there is major support around $10 per share. And I think anywhere around book is a good place to begin building a position regardless of whether a buyout ever occurs.

So Tim, if you are reading this, give me a ring and we can plot the takeover of Nintendo together.

* I currently do not own any shares of Nintendo at this time but may purchase some in the future.

Top Five Things Not to do on LinkedIn

While a tremendous amount has been written about how to leverage the web with social media, there hasn’t been nearly enough written about what NOT to do… and even if there has, there are not nearly enough people listening. Here are the top five taboos I see people try on LinkedIn.

  1. Overuse of “Visionary” – If you have to describe yourself on LinkedIn as a “visionary” you are most likely not one. Let someone else call you this, and don’t post it on your profile.
  2. Bad Photo Selection – Because it’s your professional profile, don’t post a picture of your child, car or some other confusing image. The imagesize is small to begin with, and if I’m trying to remember who you are (especially if I only recently met you), I’d prefer to see a picture of good enough quality that I can actually recognize you.
  3. Self-Aggrandizing Thought Leaders – See “visionary” above.
  4. Unsuitable Recommendations Requests – Don’t ask for undeserved recommendations, particularly when a) you barely know them, b) they really didn’t do anything with you worth recommending, or even worse c) when they actually have a poor opinion of your work product. Talk about an awkward request!
  5. Connection Collectors – People who connect to people they have never met and have nothing to share are far too common. They often send a connection request with no explanation whatsoever or even worse they claim to have worked with you previously while you have no clue who they are.

What are your top 5 things not to do with LinkedIn or social media in general?

Telecom Billing Issues – Better, Worse or Same?

I caught an article a couple of months ago which stated unauthorized phone charges cost Americans $2 billion per year. Check out the article that appeared on CNN. It primarily focuses on third-party billing abuses. While some of these charges can be legitimate, there have been many cases documented that show companies preying on the unsuspecting.

As a consumer, it’s fairly easy to control “cramming” of third-party solutions onto your bill. To do so, simply call your phone company and ask it to shut off “third-party billing.” This should do the trick for most land lines. You can also have a similar conversation with your wireless provider. It is far too easy to get charged for applications or additional services by texting or “accepting” an online agreement without clearly understanding the fine print.

Unfortunately, this is not just an individual consumer issue. Businesses of all sizes have been targeted for various kinds of fraud. At least the home consumer often knows what to expect when paying for service each month. If that relative constant changes from one month to the next, the person often becomes aware of the problem fairly quickly. With businesses, the problem is much more difficult to isolate as telecom bills can fluctuate dramatically from month to month.

The aforementioned article misses another common factor in billing errors. Other than cramming, there is a high incidence of “normal” billing errors to include lines that are still being billed after they were ordered to be disconnected, or coding errors and credits that were never properly applied. Companies often miss opportunities to reduce expenses not only because of their sheer size, but because multiple services ordered at different times make it extremely difficult to know what is really being utilized. It requires a lot of time, patience and understanding to complete a full audit to clean things up. Most IT and telecom staff members simply don’t have the time to go through every detail on the bill, nor do they have the depth of expertise to fully deal with all of these issues.

On the positive side, more attention has been given to these issues in the media and we see CFO’s, CIO’s and IT leadership in general much more aware, and often seeking assistance. Plus, most carriers now provide electronic billing information which can more readily feed a TEMS solution than in the past. Based on the issues our company has seen firsthand, I don’t think these problems have necessarily gotten any worse, but I don’t think they are any better, either. At least today there are superior tools and processes available to the industry to combat these problems.

What Happened to my Toastettes?

When I was a kid, there were three breakfast foods I particularly loved when, on the rare occasion, I was able to avoid mom’s usual well-rounded breakfast. These were chocolate chip cookies, peanut butter and jelly sandwiches and Toastettes, all served with a giant glass of milk. For those of you who have never eaten Toastettes, they were similar to a Pop Tart but much better. They had a thinner, less doughy crust, lightly sprinkled with sugar, that turned a wonderful golden brown in just a couple of minutes in the toaster. I can still remember the delicate crunch of the edges contrasted with a comfortingly warm and chewy center.

I am not alone, am I?

Today I still eat PB&Js for breakfast on occasion, but have no way of getting my Toastettes back. I’ve described them to my daughter but can’t share one with her. It’s not like I haven’t tried. From what I can tell, Nabisco stopped making these in 2002. When I contacted the company sometime shortly thereafter to ask why, they told me it was part of brand consolidation due to the merger with Kraft. It is disappointing to see a favorite product disappear no matter the reason, but especially due to a merger. In any case, every once and a while I find myself in the aisle of a grocery store scanning the shelves where the toaster pastries reside hoping to see my Toastettes make a reappearance. Unfortunately, I haven’t heard anything about a big Toastettes comeback, nor I have had a response from Nabisco. But the other day I decided to Google Toastettes to see if anyone else missed the warm and crunchy magic, and I found I am not alone! Here’s what others have to say about this product:

Here’s what the box looked like and there is a picture of a Toastette on the front:

So what does this have to do with telecom?

Given that the merger with RJR/Kraft may have been a contributing factor to my beloved Toastettes going away, I wanted to step back and think about the true impact of all of the mergers going on telecom. Will it help or hurt the consumer? Will we end up with more and better choices or will some great products, teams and technologies go away? As many of you who know me and read the BLOG are aware, I’ve been thinking that these mergers would happen for years, and am actually surprised some of these companies are just getting around to finding a strategic fit. While most acquirers could have gotten better deals a couple of years ago on the acquisitions they are now attempting, they do have one thing going for them; the ability to obtain cheap money through the bond markets.

Who has made some of the best deals so far?

In no particular order, let’s take a looks at a few of these tie ups:

Level3 acquiring Global Crossing – Wow!!! This was a shocker. I kept thinking Global Crossing should have been taken off the board a couple of years ago. It made sense for a major CLEC or IXC that lacked an international footprint to pull the trigger on a deal like this. I was just surprised that Level3 was the one to acquire it, and that they could pull it off with the debt load they were already carrying. Several people have said that Level3 paid too much, but so far the market likes the deal, with Level3 stocks appreciating quite a bit from where the stock trading was before the deal was announced.

CenturyLink acquiring Savvis – After just recently completing the acquisition of Qwest, CenturyLink sent a major message to everyone in the industry that they intend to be a player. Many people I have talked with over the past year have questioned what CenturyLink would do with Qwest Business and whether or not they had a vision of how to compete in the business segment. I think this acquisition tells you how committed CenturyLink is to building value and revenue in their business segment. Hands down, Savvis was one of the best plays in this space left on the board.

AT&T acquiring T-Mobile – This acquisition probably has the biggest question mark next to it due to the regulatory issues facing the companies and a vehement opponent to the transaction in Sprint. It seems the crowd believes there is already very limited competition in the wireless space along with major barriers to entry, so there are quite a few people rooting against this. That said, the merger makes a ton of sense on paper for both companies as their size and scale should make it easier for them reduce costs, improve their network and to roll out LTE much more quickly. If this does go through, I am interested in finding out the terms and conditions of what the newly combined company might have to give up in order to get the deal to go through. While Sprint is protesting the loudest, I think the biggest long-term loser would be Verizon as it would make AT&T a much tougher competitor on almost every facet of the business.

I will monitor these mergers and comment on some of the others in an upcoming blog, in the meantime does anyone have any connections at Nabisco? I am craving a Toastette.

Demand Response Helps ERCOT and CPS during Extreme Winter Weather

This month offered our company a unique way to help out during the extreme cold that swept much of the nation in February. As I have mentioned in my series of BLOGs on “Being Green,” we have tried to utilize a number of solutions to help lower our energy usage and deliver ROI to our company. One of the programs I mentioned in a prior post was related to participating in our local demand response program. Through this program, we curtail power usage by coming off the grid and generating our own power for a period of time. While this is something we normally do during the summer months (when temperatures can reach into the 100s), we have never been asked to do this during the winter months before.

Starting on February 2, we received notices from CPS (our local energy provider) that ERCOT (Electric Reliability Council of Texas) was calling a “Power Emergency.” In order to prevent blackouts, CPS asked everyone to shut off non-essential services and curtail usage. They also began dropping circuits for 30-45 minute increments, classified as a rolling brownout. The amount of power being shed in our area amounted to 7 percent of the Texas electric load, or about 70,000 customers that would be without power. It’s our understanding that this problem was precipitated by the extremely cold temperatures, but exacerbated because a number of power plants in the state were currently offline for overhaul and maintenance.

After receiving this notice, we shut down non-essential systems and also switched over to our generator so that we could take additional load off of the grid. Though these measures may be small, I was glad we were in a position to do something to improve the situation. If your company is not currently participating in a demand response program, I highly recommend looking into it as there are important benefits for everyone involved.

2011 Themes and Forecast

Last year I stuck my neck out with “10 Themes and Predictions for 2010” and got quite a few things right. I did fall short in two areas, though, as I thought we would see substantial new taxes on telecom to assist with huge deficits (it hasn’t happened in the U.S. yet, but notice they are at least discussing this measure overseas: ). I also thought we would see a number of tech mergers, and though I was on the money that this would occur, not one of my candidates was acquired. I would like to point out that I wasn’t totally wrong about the companies I mentioned; every one of them was undervalued, and though no other company decided to gobble them up, investors sure did. I bet there are more than a few companies who would have liked to acquire one of these, but now the valuations make it much harder so I’m removing most of them from the likely-to-be-taken-over list. They are no longer undervalued, in my opinion.

Closing Price

Closing Price

Percentage of






Adtran ADTN




Fortinet FTNT




Extreme EXTR




Juniper JNPR








Riverbed RVBD




Average Return



This year I will stick my neck out a bit further and get a little more specific with some additional themes and predictions. I look forward to your feedback.

1) M&A Continues – Though I mentioned this last year, there are still some really interesting pieces on the board throughout technology in general and in the telecom space. Most of the companies mentioned below will, in my opinion, either need to acquire someone or be acquired to stay viable.

  • XO – Icahn tried to take it private a while back and does have majority control. They have some nice assets especially in some of their fiber-rich markets. The question is what does Icahn want to do with this?
  • Global Crossing – Some of the best international assets and routes are held inside this company. Keep in mind they have had a ton of financial issues in the past but have had the benefit of bankruptcy to clean some of this up. On the downside, this company is still losing money and sports a negative book value. Global Crossing would be a great asset for a number of companies trying to move upstream in the Global Enterprise space.
  • Sprint – After completing what is perhaps one of the worst mergers of all time, the acquisition of Nextel wiped out billions of dollars of equity, added to debt, brought on a string of losses, caused additional customer support problems, destroyed employee morale, diverted investment from other key aspects of their business, and I could go on. However, you can see that there are improvements being made and even with the $15 billion in debt (if you subtract cash on the books) this company still trades at less than book value. Given that they are one of the major wireless players, would it really be surprising for the company to be reunited with Embarq at CenturyLink at some point or perhaps acquired by Google (which has been floated a couple of times)?
  • Here are a few more names that I think are likely plays due to growth in the cloud, fiber assets or just ripe for consolidation: Blue Coat Systems, Tekelec, NTELOS, Skype and MySpace.

2) Continued Uncertainty – As the recession rolls on (or at least its close cousin, the jobless recovery), it will begin to alter purchasing and business decisions differently even than previous years. Companies will begin taking gambles they would not have even considered three to five years ago. As companies are already operating very lean due to the recession, IT and other leadership will be pressed to continue to find ways to cut cost. This will lead to opportunity for some but also cause many businesses to make risky choices that may not have been thoroughly vetted.

3) Microsoft Goes Three for Four – After scoring hits with Kinect and Windows 7 in 2010, Microsoft finally makes inroads on the Telecom side. Though Windows 7 Mobile may be a bust, some studies have shown that up to 30 percent of Enterprises plan to deploy Lync server in some form or fashion. There are still issues to be addressed but Microsoft appears to have finally gotten many things right.

  • Virtualization supported in Lync Server
  • Requires fewer physical servers (many configurations will need only one server compared to four in OCS 2007)
  • Lync will provide single client instant messaging, web conferencing, presence, voice, voice mail, etc. vs. having separate clients in OCS 2007

4) Smartphones and Tablets Outsell Notebooks and Desktops – This isn’t the demise of the desktop as we happen to be in a major upgrade cycle due to Windows 7. However, phone upgrades are happening at a much more rapid pace than desktops and laptop replacements. Pricing and ease of use makes smartphones and tablets available to a huge audience. Almost every manufacturer has added some form of a smartphone to their line ups and there are very few plain phones left that can even be purchased today. In talking with several customers, I have noted that many executives are planning to purchase large numbers of tablets for their organizations in 2011. This makes me believe that we will see a slew of mobile computing applications for business on tablets by the end of 2011. I don’t think there is any doubt why RIM and others are rushing to get their tablets out. The question is whether they are too late with Apple already having first-mover advantage.

5) Security – Security will continue to be move up the IT agenda as general socioeconomic strains expose additional needs and requirements. Mobile security breaches and management will become a major focus.

6) Compliance – Look for compliance and standards to be a major cloud driver in 2011. Many players are working as hard as they can to achieve multiple levels as quickly as possible.

7) New addictions and ailments will be linked to high social media and mobile device usage.

8) Apple obtains largest market cap of any company in the world during 2011. How does this happen, even with Exxon potentially having much higher oil as a tailwind? We’ll see iPad momentum with new models, Verizon and potentially other carriers get the iPhone soon, a continued Mac-Halo Effect and the sleek Mac Air. You never can discount what Apple might have coming down the pipeline. Even from a valuation standpoint, when you subtract Apple’s cash from the stock price, you get a very low PEG ratio.

9) Mobile Photo Sharing – Social media photo sharing gains momentum in 2011 with almost every device coming with a camera. Timing couldn’t be better for applications like Instagram

10) Crowdsourcing – Continues and gains major momentum crimping traditional agencies and attracting considerable talent from a large talent pool of disenchanted and displaced workers.

Let me know what think will happen in 2011 or if there are any additional technologies that are especially interesting.

In the interest of full disclosure, I do own shares in some of the companies mentioned in this BLOG.

Green Business Part II: The Data Center

Earlier this year, I touched upon the topic of “Green Business” and offered many practical steps businesses can take to green up, and in many cases improve productivity. As promised, I will now discuss some additional measures we are evaluating or undertaking in the data center.


We are currently evaluating a solar system which would help offset peak utilization. Solar energy systems are particularly beneficial during times of peak electrical demand when powering, heating and cooling is at its highest and most expensive (in most cities this occurs at the hottest time of the day normally in the late afternoon). Utilizing solar photovoltaics (PV) to provide a percentage of our electrical generation will reduce our electrical requirement from the utility. While this is useful, we are also designing the system to provide shading for the rooftop A/C unites thereby creating an additional benefit through cooling and energy savings. Though the pricing and energy yield is still not where I would like to see it for PV, there are some decent subsidies and credits available which can greatly reduce the payback period. Now is a good time to investigate what incentives are available in your geographic region.

Warmer Datacenters

Network equipment continues to improve. The average operating temperature on new gear averages 81 degrees which is up from the average of 72 degrees in 2004. Once you get to warmer temperatures, you have many more options to cool your equipment and reduce the number of chillers. However, you still need to move air, so a reduction in cooling offsets some of the benefit as you will end up losing some density. You must realize that running at higher temperatures also causes your equipment to work harder. Fans must run faster and will negate a portion of your overall savings. In this case, power consumption increases as the cube of the fan speed. Say the fan speed increases by 10%; that could mean an increase of power usage of more than 30%. This isn’t necessarily a deal breaker. Higher temperatures have other advantages–such as limiting the need to build extra CRAC capacity for redundancy since the equipment can run at a higher temperature in the case of a failure– just realize that as with anything – there are always unintended consequences.

Liquid cooling on the chip is an interesting technology but this technology is not mature and is out of the price range to gain widespread adoption at this time. For now, the deployment of this technology will be limited to supercomputing. Today, density is no longer the only driver. As you double the computer density, you also greatly enlarge the footprint of the equipment to support it.

Hot and Cold Aisle Containment

In this configuration, drapes, partitions and/or doors are used to seal off hot or cold aisles [PC4] in an effort to better control airflow and temperature. Many data centers are looking at containment which allows about 25kw to be used per rack.

Energy Saving Tips

1) Look for hot/cold aisle designs

2) Review equipment specs when making new purchases. It’s amazing how different, though similar, a product can be in terms of power consumption from one vendor to another.

a. Variable speed fans

b. Energy savings power supplies

c. Power management

3) Review equipment to see if you can operate in a warmer environment.

4) Consider replacing aging hardware.

As opportunities arise to change and upgrade your equipment or make modifications to your infrastructure, consider doing so with an eye towards energy efficiency, energy innovation and cost savings. The changes and investments you make today can be the subtle differences that translate into greater productivity and competitiveness tomorrow.

Interesting Developments and Trends for Techies

What do you do to keep your mind fresh and open to new ideas? For me, I like to read and understand what trends are coming down the road in the future. Some of these things challenge our beliefs, spawn new ideas, and open our eyes to the fact that we only work in a very narrow sliver of what is happening in the world. Here are some eye-opening, thought-provoking advances and technological trends you should know about.

Rex Robo Legs – How about an advancement that could greatly increase the mobility of persons confined to a wheelchair? The Rex was designed so the user can transfer from the wheelchair into the robo legs, strap in and go. The robo legs are powered by battery and “driven” by a control pad and joystick.

FireSheep – Have you heard how even the novice can easily capture social media credentials over WiFi through Firefox using an add-on called Firesheep? This proves the industry still has a long way to go in protecting the use of data. This type of tool creates a number of ramifications for companies and individuals alike.

Maintenance Debt – According to a recent Gartner study, companies are incurring an “IT Debt” totaling $500 billion this year. This debt is compiled due to tight budgets which have kept companies from upgrading their software. The report goes on to state that the debt could rise to $1 trillion by 2015. Besides the long-term debt, which may need to be paid later when upgrades are needed, there is an associated risk of letting the software get so out of date that tax, legal and various bugs and other security concerns result from the unaddressed issues and unaware IT staffs.

Canon Wonder Camera – “Never take a picture the same way again.” Should I shoot a still picture or a video? How about both, and never have to choose which one you want to take? This concept camera is something Canon thinks is possible to bring to market within the next 20 years with many elements of it making it to market even sooner.

InteraXon Thought Controlled Computing – Look mom no hands! Though this technology holds potential for many applications, the company is focusing on deploying into the video game market first.

What have you seen lately that has you thinking about the future?